Friday, May 09, 2008

Fat tax break for felon

It just gets better and better. This from the Chicago Sun Times yesterday:

Key Rezko witness Stuart Levine saved $351,000 on property taxes over 11 years

Stuart P. Levine, the star prosecution witness in Tony Rezko's corruption trial, might be an admitted drug user and felon. But he's savvy when it comes to his property taxes.

Levine found a way to save $351,715.12 over an 11-year span. And -- unlike many of the crooked deals Levine admitted to on the witness stand -- his tax break was perfectly legal.

Levine got his break through the Illinois Historic Preservation Agency's "property tax assessment freeze" program. The idea is to offer tax breaks to encourage people to renovate historic homes.

First, you make sure your home meets the state's criteria for "historic." Then, you do the construction work, making sure the project is up to state standards.

If the state agrees, you get a "certificate of rehabilitation." That freezes the assessed value of your home -- the figure your property taxes are based on -- for eight years. In the next four years after that, your assessment is gradually ramped back to normal.

Levine's house, on Deere Park Drive in Highland Park, is a good example of how lucrative the program can be.

Levine and his wife, Sheri, bought what's known as the E.C. Fucik house in the early 1990s for $1.8 million, Lake County property records show. It's a stone, English-manor-style structure that dates to the 1920s, overlooks Lake Michigan and has a private beach.

The Levines wanted more space, an updated kitchen and new windows, among other things. So they hired an architect to oversee plans for a two-story addition, plus interior work, records show.

Under historic-preservation rules, the addition and other work had to match the existing house. The Levines ended up spending $588,327 on their rehab project, which wrapped up in November 1995.

Then, they reaped the financial benefit. Between 1996 and 2007, the Levines paid $338,977.51 in property taxes (see chart). Had their house not been part of the state program, they would have paid more than double that amount in property taxes -- $690,692.63 -- during that time.

Now, the freeze has expired. And the Levines are moving out.

They put their house on the market Jan. 2, with an asking price of $4.95 million -- about double what they paid for it and spent on renovations.

The six-bedroom house -- with four fireplaces and a four-car garage -- went under contract in early March for an undisclosed amount. It has yet to close, according to property records.

Levine's home is among 3,158 houses and condos statewide allowed in the tax-freeze program since 1985. Preservationists credit the tax breaks with keeping historic buildings in good shape.

A downside: Other taxpayers pay a little more in taxes to make up for people who have the tax breaks. Exactly how much depends on the number of historic structures in various taxing districts.

Originally charged with money-laundering, attempted extortion, mail fraud and other crimes, Levine pleaded guilty to two of the 24 counts against him. He's expected to get 67 months in prison.

Chris Fusco